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Trade liberalization and the environment in Vietnam

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  • Mani, Muthukumara
  • Jha, Shreyasi

Abstract

Vietnam's integration with the international economy has increased significantly over the past decade, aided by substantial liberalization of trade, and appears set to increase further as trade-expanding measures take full effect. This dramatic shift in Vietnam's trading patterns has important implications for the environment and use of natural resources. This paper offers a systematic analysis of the trading and investment patterns to give a broader understanding of the environmental implications of greater openness of the economy during the past decade. The results suggest increasing manufacturing and export activity in water and toxic pollution-intensive sectors compared with the less pollution-intensive sectors. The story is, on the surface, consistent with the changing composition of Vietnamese production and exports away from traditional sectors and toward pollution-intensive manufacturing (especially leather and textiles). The paper also highlights the need to consider strengthening environmental policies while further trade liberalization is being contemplated through Vietnam's joining of the World Trade Organization.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 3879.

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Date of creation: 01 Apr 2006
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Handle: RePEc:wbk:wbrwps:3879

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Keywords: Environmental Economics&Policies; Water and Industry; Economic Theory&Research; Free Trade; Green Issues;

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References

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  1. Muthukumara Mani, 1996. "Environmental tariffs on polluting imports," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 7(4), pages 391-411, June.
  2. Auffret, Phillipe, 2003. "Trade reform in Vietnam : opportunities with emerging challenges," Policy Research Working Paper Series 3076, The World Bank.
  3. Ederington Josh & Levinson Arik & Minier Jenny, 2004. "Trade Liberalization and Pollution Havens," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 3(2), pages 1-24, November.
  4. Prema-chandra Athukorala, 2005. "Trade Policy Reforms and the Structure of Protection in Vietnam," Departmental Working Papers 2005-06, The Australian National University, Arndt-Corden Department of Economics.
  5. Tobey, James A, 1990. "The Effects of Domestic Environmental Policies on Patterns of World Trade: An Empirical Test," Kyklos, Wiley Blackwell, vol. 43(2), pages 191-209.
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Cited by:
  1. Ulla Lehmijoki & Tapio Palokangas, 2010. "Trade, population growth, and the environment in developing countries," Journal of Population Economics, Springer, vol. 23(4), pages 1351-1370, September.
  2. World Bank, 2005. "Vietnam Business : Vietnam Development Report 2006," World Bank Other Operational Studies 8314, The World Bank.
  3. Cunha, Barbara & Mani, Muthukumara, 2011. "DR-CAFTA and the environment," Policy Research Working Paper Series 5826, The World Bank.

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